NFIB Urges Congress to Fix the ACA Definition of Full-Time Employee

Date: January 23, 2015

Update:The bill, H.R. 30, passed the House with bipartisan support today by a vote of 252-172. It goes next to the Senate where it will need 60 votes to proceed to the President’s desk. In the Senate the measure has two Democratic co-sponsors: Indiana Senator Joe Donnelly and West Virginia Senator Joe Manchin. Four more Democrats would have to cross over to support the measure in order to advance. Click here to read NFIB's Press Release.

Background:

The Patient Protection and Affordable Care Act (ACA) defines full-time employee for the purpose of the employer mandate as an employee who works an average of 30-hours per week (130-hours per month). Prior to ACA’s enactment, the determination was left up to the employer. Similarly, the Fair Labor Standards Act has long dictated that overtime pay starts after 40-hours per week. Thus, employers and employees have long understood “full-time” to be equivalent to 40-hours per week.

The employer mandate is a requirement that businesses with 100 or more full-time or full-time equivalent (FTE) employees offer qualified, “affordable” health insurance to 70 percent of full-time employees or pay costly penalties beginning in 2015. In 2016, businesses with 50 or more full-time or FTE employees must offer qualified, “affordable” health insurance to 95 percent of full-time employees and their dependents or pay costly penalties.

The 30-hour full-time definition is already resulting in less opportunities, fewer hours and lower incomes for employees. Small businesses are already being forced to shrink their workforce below and restricting workforce growth above the 50 employee threshold in preparation for the costly mandate. In a recent NFIB Federal Member Ballot, 68 percent of NFIB members supported Congress changing the definition of full-time employee, for the purposes of the ACA, from 30-hours per week to 40-hours per week.